ILNews

Opinion regarding insurance company considers definition of ‘ever’

Back to TopCommentsE-mailPrintBookmark and Share

An Indiana Court of Appeals panel was split in an opinion released today that considered the definition of “ever” on a home insurance application when it came to whether the homeowners insurance coverage was ever “declined, cancelled, or non-renewed.”

While the majority opinion found that “ever” should include all insurers who may have cancelled the plaintiffs’ coverage, a dissenting judge wrote that in this case, “ever” should have only included the cancellations by the defendant insurance company.

In Allied Property and Casualty Insurance Company v. Linda Good and Randall Good, No. 85A04-0905-CV-240, Linda and Randall Good had a fire March 16, 2003, that destroyed their home and all of its contents.

Only Linda’s name was on the policy she had with the insurance company. The policy was to last one year, beginning July 2, 2002. The insurance company had neither denied nor paid their claims regarding the fire pending an ongoing investigation concerning the fire’s cause. Linda sued March 9, 2004, for breach of contract based on the non-payment of the claim.

Two trials took place. The first trial was in December 2008, which ended in a mistrial. The second trial in January 2009 was bifurcated to address Linda’s breach of contract claim, to address Allied’s third-party claims against Randall that he made false statements about the fire, and to address Allied’s counterclaims against Linda.

Among Allied’s counterclaims were that Linda misrepresented her insurance cancellation history on the application. If the insurance company had known her true cancellation history, Allied claimed, the company would have either denied her coverage or required a higher premium for the coverage.

After hearing the evidence in the January 2009 trial, the court entered a directed verdict for the Goods. The jury awarded slightly more than $1 million in damages to Linda.

However, the Court of Appeals disagreed with the trial court, finding that because Linda acknowledged that at least one and possibly three insurance companies had cancelled policies held by Linda and Randall, she had indeed misrepresented her cancellation history on the application when she claimed she was never denied coverage.

Linda claimed that because the way the form was worded, she interpreted it to mean whether she was ever denied coverage by Allied, and therefore didn’t include her cancellations from other insurance companies.

The Court of Appeals found that this misrepresentation was material in this case.

“A misrepresentation on an application for an insurance policy is ‘material’ if the fact misrepresented, had it been known to the insurer, would have reasonably entered into and influenced the insurer‘s decision whether to issue a policy or to charge a higher premium,” wrote Judge Melissa S. May for the majority.

However, in a footnote the court clarified this definition by adding, “Our opinion … should not, and cannot, be read to encourage, or even permit, parties to comb through insurance applications in hopes of finding any false statement in an effort to reduce premiums or avoid paying benefits. Only a ‘material’ false representation could permit either result.”

Because of these findings, Judge May wrote, “the trial court erred by denying Allied’s motion for summary judgment. We reverse and remand for entry of judgment for Allied on all counts.”

However, while Judge Michael P. Barnes concurred, Judge L. Mark Bailey wrote a 9-page dissent.

Including an image of the application field in question, he wrote the application field about past insurance cancellations was unclear as to whether “ever” included all insurance companies or just Allied.

“Taking ‘ever’ out of its context seems to me to disregard how a reasonable person could construe the question,” he wrote. “Reading the form as presented above, a reasonable person could indeed interpret the item about prior cancellations as pertaining to the current insurer – particularly since the section heading is ‘INSURANCE COVERAGE,’ not ‘Prior Insurance Coverage,’ ‘Coverage History,’ or the like.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. The appellate court just said doctors can be sued for reporting child abuse. The most dangerous form of child abuse with the highest mortality rate of any form of child abuse (between 6% and 9% according to the below listed studies). Now doctors will be far less likely to report this form of dangerous child abuse in Indiana. If you want to know what this is, google the names Lacey Spears, Julie Conley (and look at what happened when uninformed judges returned that child against medical advice), Hope Ybarra, and Dixie Blanchard. Here is some really good reporting on what this allegation was: http://media.star-telegram.com/Munchausenmoms/ Here are the two research papers: http://www.sciencedirect.com/science/article/pii/0145213487900810 http://www.sciencedirect.com/science/article/pii/S0145213403000309 25% of sibling are dead in that second study. 25%!!! Unbelievable ruling. Chilling. Wrong.

  2. MELISA EVA VALUE INVESTMENT Greetings to you from Melisa Eva Value Investment. We offer Business and Personal loans, it is quick and easy and hence can be availed without any hassle. We do not ask for any collateral or guarantors while approving these loans and hence these loans require minimum documentation. We offer great and competitive interest rates of 2% which do not weigh you down too much. These loans have a comfortable pay-back period. Apply today by contacting us on E-mail: melisaeva9@gmail.com WE DO NOT ASK FOR AN UPFRONT FEE. BEWARE OF SCAMMERS AND ONLINE FRAUD.

  3. Mr. Levin says that the BMV engaged in misconduct--that the BMV (or, rather, someone in the BMV) knew Indiana motorists were being overcharged fees but did nothing to correct the situation. Such misconduct, whether engaged in by one individual or by a group, is called theft (defined as knowingly or intentionally exerting unauthorized control over the property of another person with the intent to deprive the other person of the property's value or use). Theft is a crime in Indiana (as it still is in most of the civilized world). One wonders, then, why there have been no criminal prosecutions of BMV officials for this theft? Government misconduct doesn't occur in a vacuum. An individual who works for or oversees a government agency is responsible for the misconduct. In this instance, somebody (or somebodies) with the BMV, at some time, knew Indiana motorists were being overcharged. What's more, this person (or these people), even after having the error of their ways pointed out to them, did nothing to fix the problem. Instead, the overcharges continued. Thus, the taxpayers of Indiana are also on the hook for the millions of dollars in attorneys fees (for both sides; the BMV didn't see fit to avail itself of the services of a lawyer employed by the state government) that had to be spent in order to finally convince the BMV that stealing money from Indiana motorists was a bad thing. Given that the BMV official(s) responsible for this crime continued their misconduct, covered it up, and never did anything until the agency reached an agreeable settlement, it seems the statute of limitations for prosecuting these folks has not yet run. I hope our Attorney General is paying attention to this fiasco and is seriously considering prosecution. Indiana, the state that works . . . for thieves.

  4. I'm glad that attorney Carl Hayes, who represented the BMV in this case, is able to say that his client "is pleased to have resolved the issue". Everyone makes mistakes, even bureaucratic behemoths like Indiana's BMV. So to some extent we need to be forgiving of such mistakes. But when those mistakes are going to cost Indiana taxpayers millions of dollars to rectify (because neither plaintiff's counsel nor Mr. Hayes gave freely of their services, and the BMV, being a state-funded agency, relies on taxpayer dollars to pay these attorneys their fees), the agency doesn't have a right to feel "pleased to have resolved the issue". One is left wondering why the BMV feels so pleased with this resolution? The magnitude of the agency's overcharges might suggest to some that, perhaps, these errors were more than mere oversight. Could this be why the agency is so "pleased" with this resolution? Will Indiana motorists ever be assured that the culture of incompetence (if not worse) that the BMV seems to have fostered is no longer the status quo? Or will even more "overcharges" and lawsuits result? It's fairly obvious who is really "pleased to have resolved the issue", and it's not Indiana's taxpayers who are on the hook for the legal fees generated in these cases.

  5. From the article's fourth paragraph: "Her work underscores the blurry lines in Russia between the government and businesses . . ." Obviously, the author of this piece doesn't pay much attention to the "blurry lines" between government and businesses that exist in the United States. And I'm not talking only about Trump's alleged conflicts of interest. When lobbyists for major industries (pharmaceutical, petroleum, insurance, etc) have greater access to this country's elected representatives than do everyday individuals (i.e., voters), then I would say that the lines between government and business in the United States are just as blurry, if not more so, than in Russia.

ADVERTISEMENT